On April 4, 2016, Westfield Financial, Inc. (Nasdaq: WFD), headquartered in Westfield, MA, announced that it entered into a definitive agreement to acquire Chicopee Bancorp, Inc. (Nasdaq: CBNK), headquartered in Chicopee, MA, creating the largest locally managed bank in Hampden County, Massachusetts, the second largest bank in terms of deposit market share in the county, and the fourth largest in terms of deposit market share in the Springfield MSA. The company will be renamed Western New England Bancorp, with Nasdaq trading symbol WNEB, following closing to reflect the broader reach and target market of the new entity. The combined company will have total assets of $2.1 billion, tangible equity of over $215 million and 21 branch locations serving customers throughout western Massachusetts and northern Connecticut. The combined bank will continue to do business under the Westfield Bank name.
Under the terms of the agreement, Chicopee shareholders will be entitled to receive 2.425 shares of Westfield common stock for each share of Chicopee common stock, equal to $20.42 per share, or approximately $110.2 million in the aggregate, based on the closing price for Westfield common stock on April 4, 2016. Upon closing, Westfield shareholders will own approximately 59% of stock in the combined company, and Chicopee shareholders will own approximately 41%. The transaction is expected to be approximately 14% accretive to the earnings per share of Westfield, beginning in the first full year. Initial tangible book value dilution of approximately 6% is expected to be earned back within five years.
The transaction closed on October 21, 2016.
Donald Williams, Chairman of the Board of Westfield, and James C. Hagan, President and CEO of Westfield, remain Chairman and President and CEO of the combined institution. William J. Wagner, President and CEO of Chicopee, joined the executive management team of Westfield, and joined the board of the combined institution as Vice Chairman. Four additional board members from Chicopee also joined the combined board. This is the first in-market merger the community has seen in over 25 years, and as such, will not result in a significant outflow of resources or shift the focus of the combined franchise elsewhere, but rather will intensify and strengthen the company’s ability to serve its local markets, consumers and businesses that make both Westfield and Chicopee successful.
Griffin Financial Group, LLC served as exclusive financial advisor to Westfield Financial, Inc. in this transaction and rendered a fairness opinion to its Board of Directors.
The press release and investor presentation for the transaction can be seen here by clicking on the respective links.
For more information on this transaction, please contact Richard Quad, Senior Managing Director and Co-Head of the Financial Institutions Group, at 646.254.6387, or Stacey Weikel, Senior Vice President, at 610.478.2015.
